To every human being, death is inevitable.  We are not only aware of as to when, how and where it will occur. One can only prepare for this eventuality as a way of avoiding turning a difficult time in your life, into an unbearable one.

I have observed that in many instances and to those without funeral insurance, death be it of a beloved one which you are expected to contribute towards the funeral expenses occurs when you least expect it. And it follows that when it occurs like that in most situations it will be around that time of the month when the budget will be very tight. Even trusted colleagues will be in a similar sorry and sad situation in which they cannot also assist. The sad reality will be turning to borrowing and in most cases from cash barons whose interest rates are usurious. This move will turn the difficult time into a very unbearable one where it will be very difficult to extricate yourself from.

Death. It is not something we like to think about but when there is a death in the family most people wish they had extra cash to pay for the funeral.

Like it or not, death is a part of life and something that has to be planned for. Buying a funeral policy for you and your family should not be seen as a grudge purchase. It is about you protecting your family against the financial burden of funeral expenses in the event of the death of a loved one.

We must at all times remain alive to the fact that even if our bank accounts are saturated, the situation can change immediately if the bank becomes aware of your death. The bank account will immediately be frozen once they become aware of the account holder’s death and might mean that the family will not be able to access the money from the moment the account is frozen until the estate is finalized. It might take a lengthy period of time for the estate to be finalized even up to two years and again there is duty to be paid before the funds become available to the beneficiaries.

A funeral insurance policy does not form part of the estate so the proceeds become available as soon as the insurers receive all the required documents for death claims processing. Most insurers will pay the funeral benefit within two hours to about 48 hrs of death notification. This will afford the deceased a dignified burial.

The other characteristics of a funeral policy are:

  • Its affordability. Depending on the amount of cover selected, roughly about (1 USD) one United states dollar per month may purchase a cover of about (1500 USD) one thousand five hundred United States dollars.
  • Funeral pay-out for death by natural causes, dread disease or accidental death
  • There are no waiting periods for death by accident whilst a three month to about six months waiting period may be imposed for natural death.
  • Funeral cover for extended family – when taking out your funeral insurance policy, you can indicate who you would like to include in the policy. I encourage people to include as dependants all those whom we know that we are expected to contribute on their death.
  • You can add a grocery benefit to your funeral cover, where you will receive a monthly benefit for a certain specified period to purchase groceries. This might not sound like much, but when the breadwinner passes on this could come in really handy.
  • Some funeral insurance policies will pay for a specified coffin, a free coffin nameplate as well as a free artificial floral wreath for the coffin.
  • If the funeral costs are less than the amount paid out then the rest of the money can be used for other family needs like groceries, rent, school fees and transport. We know that even if there are other benefits to be provided from elsewhere like from the employer, they may take time before they become available and this may come in handy.

The downside for having a funeral policy can best be summarized as follows:

  • If you do not keep up the payments as specified in the terms and conditions – they keep all your money regardless of the initial payments made to the Insurer or period payments have been made.
  • By the time you get to the end of the policy term, you are pretty certain to have paid in far more than your family will get back. So, you have lent them your money, interest-free, for 20 years or so, then they give MOST of it back, as long as you do not miss more than one or two payments while you are quietly expiring.
  • In order for you to “keep up with inflation,” they will keep trying to sell you top-up plans of the same awful you have already bought.
  • Paying more over time than the actual cost of a funeral. Depending on when one purchases the policy, the overall cost will likely end up outweighing the policy’s benefit – this is how insurance companies generate profit. If an individual purchases a policy at a younger age, they are required to make payments on a continuing basis in order to be eligible to claim. Thinking long term is crucial: will the cost of insurance over a lifetime be more than that of a funeral? Invariably, the answer is yes.

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